EPA to finalize pollution controls at Arizona plants

FLAGSTAFF, Ariz. -- The U.S. Environmental Protection Agency was expected
to meet a deadline Thursday on a plan to control emissions from three Arizona
power plants that it contends have impaired visibility at places like the Grand
Canyon, but a spokesman for the agency said the details wouldn't immediately be
available.

The EPA had proposed approving Arizona's air-quality plan to reduce sulfur
dioxide and soot at the Cholla, Coronado and Apache coal-fired plants. But when
it came to nitrogen oxide emissions, the EPA suggested the state's plan didn't
go far enough and came up with one of its own.

The conflict highlights the tension between the EPA and businesses after an
election season in which the notion of heavy-handed environmental regulations
became a popular argument for Republican candidates. Arizona and the
administration of Republican Gov. Jan Brewer contend the EPA's proposals would
cost hundreds of millions of dollars, causing utility rates to sharply increase
for residents.

Instead of low nitrogen-oxide burners, the EPA hinted it might require that
some of plants' older units be equipped with selective catalytic reduction
technology to keep 17,000 tons nitrogen oxide from being released into the air
and causing visibility issues at 18 national parks and wilderness areas.

Environmental groups contend the regulations are long-overdue and the benefits
would extend not only to places like the Grand Canyon but to public health. They
say the EPA's proposal is a step in the right direction.

EPA regional spokesman Rusty Harris-Bishop in San Francisco said the agency
would sign off on a plan late Thursday to meet a court-ordered deadline and
would release details Friday.

The EPA has said it proposed rejecting Arizona's plan for nitrogen oxide
emissions because it didn't fully address the issues raised by the agency and
federal land managers when it came to cost analyses, the best available
technology for controlling emissions, and visibility benefits.

The operators of the power plants are waiting to see whether they would have to
invest hundreds of millions of dollars for the upgrades for what they say would
be negligible improvement to air quality. Those costs would be passed on to
ratepayers.

``We're in favor of making sure our plant has state-of-the-art equipment,''
said Damon Gross, a spokesman for Arizona Public Service, which operates the
1,027-megawatt Cholla Power Plant near St. Johns. ``The question becomes, what
is the benefit you're getting versus the cost of what customers are going to
assume because of that.''

EPA's proposal would mean a $436 million investment among Cholla's owners,
which Gross said would be passed on to ratepayers. The bill for residential
users would go up nearly $19 a year, while small business customers would pay
almost $32 more annually, he said.

The Salt River Project, which owns and operates the Coronado Generating Station
near Holbrook, said it would be on the hook for another $119 million under the
EPA's proposal. Kelly Barr, the senior director of environmental management
policy and compliance for SRP, said that's on top of a $500 million investment
that partly came out of a previous consent decree with the EPA for upgrades.

``We felt like we had met a very high standard of compliance,'' she said. ``We
felt like we would be done at that facility for a while.''

A spokesman for Arizona Electric Power Cooperative wrote to the EPA earlier
this year to say the company estimated it could be forced to spend up to $219
million. The cooperative runs the Apache Generating Station near Cochise.